Service Sector Recovery Stalls as Activity Declines Unexpectedly

The recovery in the service sector has come to a halt and activity in the sector is unexpectedly decreasing, according to the purchasing managers' index from Swedbank and Silf. The slowdown is weighing down development in the business sector.

» Published: May 06 2025 at 08:32

Service Sector Recovery Stalls as Activity Declines Unexpectedly
Photo: Berit Roald/NTB/TT

The Purchasing Managers' Index for the service sector falls unexpectedly to 48.4 in April, according to Swedbank and Silf. This can be compared to an index level of 49.3 in March.

Analysts had on average expected an increase to 50.0.

"The recovery in the Swedish service sector has stalled during the spring. Many companies are waiting to make new hires and more service companies have started to scale back production plans", says Jörgen Kennemar, responsible for the analysis of the Purchasing Managers' Index according to a press release.

"Running on low gear"

An index value above 50 indicates increased activity in the sector. And analysts had on average expected the index to increase to exactly 50 in April, according to a compilation of forecasts.

Swedbank and Silf's so-called composite index for April, where the manufacturing industry's figures are included – fell to 50.0, down from 50.5 in March.

"The recovery in the business sector went into low gear in April and is weighed down by the service sector, while industry picked up pace and notched the strongest performance in three years", says Jörgen Kennemar.

Downward trend also in France and Germany

The corresponding index for the French service sector in April fell to 47.3, down from 47.9 in March, according to revised figures – which means the eighth consecutive month of slowdown. This contributed to dragging down the composite index to 47.8, down from 48.0 in March.

The Purchasing Managers' Index for Germany's service sector fell to 49.0 in April, down from 50.9 in March. This contributed to dragging down the composite index in Germany to 50.1, from 51.3 in March.

The service sector for the entire eurozone, however, remains in the growth zone, barely. The Purchasing Managers' Index for April for the sector falls to 50.1, down from 51.0 in March.

The composite index for the entire eurozone thus falls to 50.4, down from 50.9 in March.

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By TTTranslated and adapted by Sweden Herald
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